This event provided a forum to discuss some of the key Responsible Investment questions facing Authorised Fund Managers (AFM), including the current responsibilities of both AFM board members and senior executives. Responsible investment is defined by the UNPRI as the strategy and practice of incorporating environmental, social and governance (ESG) factors in investment decisions and active ownership.
The questions included:
- What role does the AFM play in deciding if and how RI is applied within the funds for which it is responsible?
- Do AFMs specifically monitor RI considerations today and if so, how do they do so?
- How can and should investment governance arrangements be evolved to incorporate RI / ESG into the purpose of the committees and what is monitored and how it is managed?
- Is applying RI just good investment management in terms of managing long term risks and seeking to optimise long term returns? Are trade-offs of short term increased risk or lower returns inevitable?
- When it comes to target market considerations, is it sensible for us to talk about customers who ‘choose’ RI investments, which suggests there are other customers who do not want RI investments?
- Where are the limits to the role of the AFM vs. the investment manager (especially as distributor) and are these roles and responsibilities different in a vertically integrated firm?